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23 Voice Experience 1 (2011-2012)

handle is hein.aba/voiex0023 and id is 1 raw text is: .~ ~ ~ ~ ~ ~ ~ ~ ~ ~ . ............. . . . .. . . . .... S1 S;5 .............p.. .p -- .. The December 2010 Tax Act Transfer Tax Highlights By the Estate Planning Committee On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insur- ance Reauthorization, and Job Creation Act of 2010. The new law includes sweeping new tax legisla- tion that makes significant changes to estate, gift, and generation-skip- ping transfer (GST) taxes. The new law may also provide an excellent opportunity to implement additional planning that could be beneficial. The favorable tax provisions of the new law last for two years only and will sunset at the end of 2012, at which time Congress will either pass new legislation or allow the provi- sions of the 2001 tax law to take effect ($1 million exemption and a top estate and gift tax rate of 55%). A brief overview of the major changes to the federal estate, gift, and GST tax systems, all of which became effective on January 1, 2011, is as follows: Favorable changes to exemp- tions and rates. The estate, gift, and GST exemptions are $5 million per individual (adjusted for inflation after 2011), and the tax rate is 35%. Compare this to the exemptions and rates in effect just prior to the repeal of 2010: the estate and GST exemptions were then capped at $3.5 million, the gift tax exemption was capped at $1 million, and the top tax rate was 45%. Lifetime gifting opportuni- ties. An individual's lifetime gift tax exemption increases from $1 million to $5 million ($10 million per married couple) so that the gift tax exemption is now unified with the estate tax exemption. For those individuals who have previously uti- lized the full $1 million lifetime gift exemptions, the new tax law per- mits an additional $4 million of life- time gifting gift-tax-free. There are more planning oppor- tunities to make significant lifetime transfers without paying gift tax that can be explored. These gifts, how- ever, may only result in a tax defer- ral if the new $5 million exemption is not extended beyond 2012 and the donor dies after 2012. The annual gift exclusion remains at $13,000 per person in 2011 (or $26,000 per mar- ried couple). Estates of people who died in 2010. For those who died in 2010, the new law provides a choice with respect to estate taxes: The default continued on page 13 Open Forum Showcases Senior Lawyer Vitality By Anthony R. Palermo M ore than 40 represen- tatives from state and local bar associations across the United States participated in the Senior Lawyers Division Open Forum at the 2011 Atlanta Midyear Meeting, which highlighted impressive growth in senior lawyer entities and relevant programmatic activities nationally. The Open Forum was initiated and organized by the SLD's State and Local Bar Association Senior Law- yers Outreach Committee. Many attendees also participated in meet- ings of the National Conference of Bar Presidents and the National Conference of Bar Executives. Welcoming and keynote remarks were presented by William T. (Bill) Robinson III, ABA President-Elect and former SLD Council member. He applauded efforts at the national, state, and local bar levels, which stress the importance of support- continued on page 14 1 - Published in The Voice of Experience, Volume 23, Number 1, Spring 2011. C 2011 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

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